RBI Imposes ₹17.80 Lakh Penalty on 2 Cooperative Banks from Gujarat and Madhya Pradesh
Moneylife Digital Team 15 May 2026
Reserve Bank of India (RBI) has imposed a penalty of ₹17.80 lakh on two cooperative banks, one from Gujarat and the other from Madhya Pradesh, for non-compliance with the directions issued by the banking regulator. The highest penalty of ₹16.30 lakh has been imposed on Shree Kadi Nagarik Sahakari Bank Ltd from Gujarat.
 
Madhya Pradesh-based Jilla Sahakari Kendriya Bank Maryadit has been penalised ₹1.50 lakh.
 
Shree Kadi Nagarik Sahakari Bank has been penalised for non-compliance with directions related to exposure norms, statutory and other restrictions applicable to urban cooperative banks (UCBs) and the management of advances by UCBs.
 
A recent statutory inspection conducted by RBI found that Shree Kadi Nagarik Sahakari Bank had breached the prudential exposure limit prescribed for a group of connected borrowers or parties. The inspection also revealed that the lender failed to ensure the end use of funds for certain loans it sanctioned.
 
Jilla Sahakari Kendriya Bank Maryadit has been fined for violating the provisions of Section 26A of the Banking Regulation Act, 1949 (BR Act), and for failing to comply with know-your-customer (KYC) directions.
 
RBI observed that Jilla Sahakari Kendriya Bank Maryadit failed to transfer eligible unclaimed amounts to the depositor education and awareness fund within the prescribed time limit. It also did not conduct periodic reviews of the risk categorisation of accounts at least once every six months, as required under RBI guidelines.
 
"After considering the reply and oral submissions of both the banks during the personal hearing, RBI concluded that the charges of non-compliance with directions were substantiated and warranted imposition of monetary penalty," RBI says.
 
In both cases, RBI says the penalties are based on deficiencies in regulatory compliance and are not intended to be pronounced on the validity of any transaction or agreement they entered into with their customer.
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